Correlation Between ASPEN TECHINC and Addtech AB
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC and Addtech AB at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ASPEN TECHINC and Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and Addtech AB, you can compare the effects of market volatilities on ASPEN TECHINC and Addtech AB and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ASPEN TECHINC with a short position of Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and Addtech AB.
Diversification Opportunities for ASPEN TECHINC and Addtech AB
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASPEN and Addtech is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB and ASPEN TECHINC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ASPEN TECHINC DL are associated (or correlated) with Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of ASPEN TECHINC i.e., ASPEN TECHINC and Addtech AB go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and Addtech AB
Assuming the 90 days horizon ASPEN TECHINC DL is expected to generate 0.49 times more return on investment than Addtech AB. However, ASPEN TECHINC DL is 2.04 times less risky than Addtech AB. It trades about 0.27 of its potential returns per unit of risk. Addtech AB is currently generating about 0.12 per unit of risk. If you would invest 24,000 in ASPEN TECHINC DL on November 7, 2024 and sell it today you would earn a total of 1,400 from holding ASPEN TECHINC DL or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. Addtech AB
Performance |
| Timeline |
| ASPEN TECHINC DL |
| Addtech AB |
ASPEN TECHINC and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and Addtech AB
The main advantage of trading using opposite ASPEN TECHINC and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC position performs unexpectedly, Addtech AB can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Addtech AB will offset losses from the drop in Addtech AB's long position.| ASPEN TECHINC vs. AOYAMA TRADING | ASPEN TECHINC vs. PennantPark Investment | ASPEN TECHINC vs. SLR Investment Corp | ASPEN TECHINC vs. Keck Seng Investments |
| Addtech AB vs. RATIONAL Aktiengesellschaft | Addtech AB vs. WW Grainger | Addtech AB vs. Fastenal Company | Addtech AB vs. Watsco Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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